“It is Highly Unlikely That Bitcoin Will Replace Fiat or Even Act as a Reserve Currency in the Future”, Attorney David Reischer

Bitcoin is the world’s leading cryptocurrency in terms of market capitalization and talks regarding its credibility, value and future are always floating around. Various experts from various domains have varied opinions regarding this asset which makes it hard to predict what will become of it as we move forward in the future.

BlockPublisher recently got in touch with an attorney David Reischer as he shared his opinions regarding bitcoin. David is also the Chief Executive Officer of LegalAdvice.com and a perspective from the legal side sure seems interesting. The following Q&A fully expresses David’s opinions regarding the bitcoin space overall.

  • Will bitcoin replace fiat or act as a reserve currency in the future? 

David: “It is highly unlikely that bitcoin will replace fiat or even act as a reserve currency in the future because bitcoin, unlike fiat currencies that are issued by a state government, does not have the sovereignty of a nation to back the bitcoin. It is important to have a sovereign nation to provide underlying asset backing behind a currency in order to justify the value of the currency in the first place. All government fiats have the backing of the tax payers of the country. Bitcoin has no sovereign nation to provide any type of underlying asset backing behind it.”

  • Is it the digital gold?

David: “Bitcoin is not digital gold but is merely an digital ledger entry that tracks the transfer of the ‘digital entry’ on the block-chain ledger. There is no actual gold backing for any bitcoin. Gold trades at $1300 an ounce based on supply demand of the underlying commodity. Bitcoin trades based merely on speculators that attempt to guess whether the demand for a single bitcoin will increase or decrease.”

  • Should this market be regulated? 

David: “Absolutely, bitcoin should be regulated because currently it is a haven for fraudsters to ‘pump and dump’ the bitcoin in manipulative tactics that move the price up and down with certain parties operating with asymmetric information depending upon how they can influence the price action. Regulation of bitcoin needs further involvement by the SEC to make sure unscrupulous parties do not manipulate the price up and down.”

  • What can governments do to curb out the negative elements linked with bitcoin? 

David: “Regulators need for owners of bitcoin that have a significant amount of the cryptocurrency to be more transparent with when they buy and sell large amounts of bitcoin. Owners that have large stakes in bitcoin should be mandated to file all their buy and sell orders with the SEC and be prohibited from making wash sales within a certain time period. These big bitcoin players that can easily push the price of a bitcoin up and down merely to manipulate the price is unfair to smaller players that easily fall prey to these artificial price movements.”

David pointed out some serious issues associated with the world of bitcoin, with manipulation being just one of them. Manipulation is also one of the reasons why a crypto-linked exchange-traded fund (ETF) has not been approved by the regulatory body in charge, the United States Securities and Exchange Commission (SEC). David also seemed to be all in on the idea of regulation in the world of bitcoin. Lack of a concrete regulatory framework is one of the reasons why so many negative elements have seeped into the bitcoin world.

From the legal and regulatory point of views, things certainly do not seem well with BTC. It will be interesting to see how things turn out for this asset as legal developments are made in the BTC world moving forward.

SEE ALSO: “Where the Public Needs to be Protected There Will be Regulations” – Managing Director Digital Asset Investment Management

Ahsan Khalid

Blockchain Developer. An Electrical Engineer with majors in software development. I present forward my insight regarding the latest happenings of the blockchain world. All views on my articles are my own. Email: ahsan@blockpublisher.com or editor.news@blockpublisher.com

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.